25 April 2018

Can your glazing business improve their invoicing process?

Invoicing is a headache. We've talked before about how time spent on accounting is a sunk cost, it has to be done but it isn't generating any profit. That being said, there are a few ways you can improve your invoicing process to make it easier for you get them sent out in a timely manner, and easier for your customers to pay you.

Are you invoicing at the right time?

If you haven't been actively keeping track of when jobs are completed or how cashflow is managed, your invoicing may be quite ad hoc and doing you a disservice. Establish a plan for how and when jobs should be invoiced and enforce it across all future jobs.

If you're not currently taking a deposit for the work at the beginning of the project then consider starting. It will help you cover the cost of material required and give you some financial padding if the project doesn't proceed as planned. Ensure that your final invoice notes the amount deducted for the deposit.

Include relevant information and format for ease of use

Make it easy for your customers to pay you by including all the information your customers need, such as the amount owing, bank account details, invoice due date, your contact information etc.

Don't neglect formatting — how you lay out your invoices isn't just about aesthetics, it's about practicality. If you're not using accounting software, it's a good idea to create a template or a range of templates to use for your invoicing. This is particularly useful if you have multiple employees creating invoices, particularly if they are for the same customer who may get confused by seeing multiple invoice styles coming from the same business.

If you're still using carbon paper for your invoicing, we strongly suggest you consider moving to a digital system. Even if you're not ready to commit to software, emailing the invoice as an attachment will make your record keeping efforts much easier. Always send invoices as a PDF so they aren't easily alterable by the customer (just in case!)

Keep track of invoices sent and due dates

Ideally you'll have point-of-sale software or at least accounting software to manage invoices but if you don't, consider at least having an up-to-date spreadsheet that can be viewed by anyone who creates invoices (but is ideally managed centrally so important information doesn't get deleted or overwritten). Make sure to include the following columns at the least:

  • Client name
  • Job description
  • Invoice number
  • Due date
  • Amount
  • Payment received
  • A separate column for tax to make filing your return easier

Update your spreadsheet as payments come in and, while it isn't fun, chasing up late payments is a necessary evil. There is a good chance that your customer has simply forgotten to pay the invoice, in which case they will be appreciative of a gentle nudge to remind them.

Be clear and consistent when it comes to pricing

It can be challenging to consistently price glazing work — the labor for each job is highly variable depending on size and cost is highly impacted by the kind of glass and hardware used. For many glaziers we talk to, they just "know" what a job will roughly cost and price it accordingly, but this makes the administrative side more difficult and it becomes impossible for management to make projections about future income.

The link between your quote and invoice should be clear to both the customer and internal staff. Inevitably there will be changes, job scopes change and that needs to be accounted for, but an obvious link between the two that accounts for increases or decreases accordingly will reassure your customer that they are getting a fair deal and make your life easier.

Put systems in place

The biggest barrier to getting invoicing right is human error so it's important that your staff are well trained and have a clear process they can refer to when in doubt. We've discussed the value of process mapping before and nowhere is it more crucial than in your accounting procedures.

If your admin team are looking after the books but haven't had any formal training, they may benefit from a short course or an online course to bring them up to speed. These vary in cost but a small investment in upskilling is worthwhile if it means keeping your accounts in good shape.

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